Standard Chartered Plc plans to raise over $500 million through Indian depository receipts (IDRs). The bank will issue 220 million IDRs by May-June, making it the first company to issue IDRs in India. The bank has filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (Sebi). Standard Chartered has appointed UBS Securities and Goldman Sachs as lead managers. The IDRs will be traded on the BSE and the NSE. Standard Chartered is currently listed on the London Stock Exchange and the Hong Kong Exchange.
Neeraj Swaroop, regional chief executive, India & South Asia at Standard Chartered Bank said the bank is going for the IDR issue not with the aim of boosting capital. ?We are well-capitalised already and there is no pressure. We are doing this issue to strengthen our presence in India,? he added. India is the key Asian market for the bank, and was the fifth-largest contributor to Standard Chartered?s profit before tax in 2009. Standard Chartered India posted a profit before tax of $1.06 billion in 2009 as against $891 million in the previous year, a rise of 19%. During the announcement of results last month, Swaroop had pointed to the strong growth in its wholesale and consumer businesses. The bank expects a credit growth of 15-20% for 2010. The bank said that consumer banking was mainly driven by focusing on secured products like mortgage at 95% and SME at 19%.
The IDR issue will be 100% book-built, In accordance with Regulation 98 of Sebi regulations. Sebi had framed guidelines for IDRs in 2006, but the central bank set up rules for issuing them only last year. IDRs, which would be issued by a depository in India on behalf of a foreign company, would be redeemable to investors only after the end of one year from the date of issue, as per RBI norms. Foreign institutional investors and non-resident Indians would be allowed to trade the IDRs.